Bombay High Court: Provisional Attachment of Bank Account ceases to have Effect after One Year

Bombay High Court: Provisional Attachment of Bank Account ceases to have Effect after One Year

The Bombay High Court set aside the provisional attachment of the Petitioner's bank account since provisional attachment ceases to have effect after the expiry of a period of one year from the date of the order.

The matter titled Implement Impex Private Limited v. State of Maharashtra & Ors, was placed before a Division Bench of the High Court of Bombay comprising Chief Justice Dipankar Datta and Justice G. S. Kulkarni.

The order provisionally attaching the Petitioner – Company's bank account was passed by the Respondent – Authorities considering the fact that the proceedings initiated against the Petitioner u/S. 67 of the Central Goods and Services Tax Act, 2017 (CGST Act) were pending. This provisional attachment was carried out in the exercise of power conferred by Section 83(1) of the CGST Act read with Rule 159(1) of the Central Goods and Services Rules, 2017 (CGST Rules).

However, it was pointed out that the proceedings against the Petitioner u/S. 67 of the CGST Act were terminated and it was currently in appeal for which the Petitioner had deposited an amount of Rs.1,25,392/- on account of pre-deposit terms u/S. 107(6) of the CGST Act.

The Petitioner – Company contended that the provisional attachment was not lifted despite a lapse of more than a year from the date on which the provisional attachment of the Petitioner's bank account was ordered. However, the Respondent – Authorities very conveniently did not advert to the legal issue raised by the Petitioner.

The Court noted the provisions of Section 83 of the CGST Act and found that every such provisional attachment ceases to have effect after the expiry of a period of one year from the date of the order.

Therefore, the bench allowed this petition by directing the Respondent – Authorities to immediately communicate to the Petitioner's banker that the attachment order has ceased to be operative and that the Petitioner may be permitted to operate the relevant bank account, which was under attachment.

The Respondent – Authorities were further restrained from initiating any further proceedings for recovery of the balance amount till the appeal was disposed of since the Petitioner had already deposited Rs.1,25,392/- u/S. 107(6) of the CGST Act.